Friday, September 17, 2010

Rich in America

Here is a bit from an article in Slate by Daniel Gross entitled "You're Rich. Get Over It: People who make $250,000 or more a year can afford a tax hike":
To a surprising degree, feeling rich or poor is a state of mind. There are people who pull down $3 million a year who are miserable and feel strapped for cash and people who make $30,000 a year who believe they have everything they need. But income data can surely tell us something. And they tell us that $250,000 puts you in pretty fancy company, especially after the collective pratfall the economy took in 2008. The Census Bureau last summer reported that real median household income was $50,303 in 2008, down 3.6 percent from 2007. It's likely that figure fell further in 2009. So a household that's making $250,000 today is making about five times the median. In fact, as this chart shows, only 2.476 million U.S. households, the top 2.1 percent, had income greater than $250,000 in 2008. (About 20 percent of households make more than $100,000.)
If the rich aren't willing to help pay the bill for good government, who will? For those with so much more than their fellow citizens to moan about "not being that rich" is seriously sad. It says these people would rather sell their "expensive" children rather than raise them. They would rather watch the country around them fall into decay rather than extend themselves a bit because they are financially able. As a Canadian who pays more in taxes than Americans, I find it amazing that Americans can so bitterly complain about "taxes". The truth is simple: taxes are the price of a civil society. If you want to live in a banana republic, in a third world country with no public services, then go ahead an gripe about "too much taxes" and keep sending in your donations to the Republican party to ensure that your country does collapse from bad government.

Here is a bit from another article in Slate by Daniel Gross:
Here are five things you need to know about the debate over extending the temporary tax cuts Congress passed almost a decade ago. (For those of you who haven't been paying attention in class, these are known as "the Bush tax cuts" because they were passed at the former president's urging, and if Congress does nothing, they will expire at the end of the year.)

1) All the representatives and senators who voted for the tax cuts in 2001 and 2003 also voted for their expiration. That's how they were designed.

2) The tax cuts could have been made permanent or extended at some point before now. Alternatively, the folks who ran fiscal policy from 2001 through 2008—the Republican White House and a Congress that was controlled for most of that period by Republicans—could have created the conditions that would have made it possible to extend the tax cuts or make them permanent. But they didn't. Instead of running balanced budgets, they appropriated hundreds of billions of dollars to fight two wars, created an expensive, open-ended entitlement without a funding mechanism (Medicare prescription drug coverage), and increased discretionary spending. Oh, and their failures of oversight, regulation, and management led to expensive, deficit-enhancing bailouts.

3) Many Republicans and some Democrats have spent much of the last year warning (falsely, it turns out) that the large deficits we face this year and in coming years would cause inflation, result in high interest rates, and turn us into indentured servants to China. Now, the same folks are arguing for … even-larger short-term deficits that somehow won't have all those ill effects. ...
There's more. Go read the whole article to get all five points that Daniel Gross makes.

The point is simple: all that moaning about "tax increase" and "the end of the world will come if the tax cuts aren't extended" is just so much hypocritical crocodile tears.

If you read a little further into the Daniel Gross article you discover this pearl of wisdom:
Turn on CNBC or look at the Wall Street Journal op-ed page these days, and you'll learn that we must keep tax rates on capital gains, dividends, and income precisely where they are because shifting them to different levels will retard economic growth. Keep this in mind: The people who designed the current, unsustainable tax system promised us that lower marginal rates, and lower taxes on capital and dividends, would boost the economy, promote investment, create jobs, spur market performance, and raise everybody's income. They were wrong. (It's no coincidence that these same people also warned us that raising taxes in 1993 would kill market returns and the economy. They were wrong then, too. They're pretty much always wrong.) As I've pointed out, the years under the current tax regime have been a lost decade. Pick your metric—median income, employment, stock market returns, economic growth—the low-tax '00s sucked.

No comments: